A girl sitting in a swing representing article about the best crypto exchanges for swing trading

Swing Trading Crypto – How to?

Swing Trading Crypto Summary

  • Crypto swing trading is a short to medium-term trading style holding the asset over a few days to several weeks.
  • Trend following, support, and resistance are common swing trading strategies.
  • Exchange trading volume, Liquidity, Trading instruments and some more aspects are important to consider when selecting your crypto trading site

A swing trader can trade in both directions but the most common is to trade the spot market in an uptrend with no borrowed funds (no leverage). This is especially true for medium to long term swing traders.

However, the swing trading strategy is applicable to shorting the crypto market as well.

Best Crypto Exchange for Swing Trading Strategy

Binance is the best crypto exchange for swing trading the most common spot market since they have great trading volumes and low fees.

Kucoin is the best crypto exchange for swing trading altcoins since they have low fees and many spot markets.

Bybit is the best crypto exchange for leverage trading since they have a low funding rate.

Gate io is the best rare altcoin exchange since they have most listed cryptocurrencies spot markets listed but not the lowest fees.

*Bonus: See all free crypto sign-up bonuses 2023 with terms and conditions.

**Events: See all Crypto events with rewards

***Bots: See the best free crypto trading bots in the article.

What Is Swing Trading Crypto?

➤Crypto swing trading is a short to medium-term trading style holding the asset over a few days to several weeks.

➤Swing traders can use technical and fundamental analyses for trading trends and opportunities.

Swing trading chart with buying and selling points

Swing trading is about finding buying and selling opportunities and holding the asset for days, weeks, or months.

A great benefit of swing trading over day trading is that swing trading requires less active trading. However, since the positions are held longer, they are subject to overnight and weekend market risk.

Cryptocurrency has excellent properties for a swing trader since it has many markets and is volatile both in short-term and long-term periods.

What is the best crypto for swing trading?

Bitcoin BTC is the best crypto for a swing trading strategy. However, it’s possible to swing trade Ethereum ETH and smaller altcoins. Remember, the smaller the altcoin, the higher the risk.

Crypto Swing Trading Strategies

Here are some of the most common crypto swing trading strategies:

  1. Trend Following: Identify and follow the prevailing trend in the crypto market. Swing traders typically enter a trade when they anticipate a continuation of the current trend based on technical analysis. This could involve using moving averages, trendlines, and other indicators to identify trends.

  2. Counter-Trend Trading: This strategy involves identifying a price point where the current trend is likely to reverse. Swing traders aim to catch the price correction or reversal after a strong trend by looking for signs of overbought or oversold conditions.

  3. Breakout Trading: Swing traders look for cryptocurrencies that are breaking out of established price ranges or patterns. They enter the trade when the price breaks above resistance or below support, expecting the price to continue moving in that direction.

  4. Support and Resistance Trading: Swing traders focus on buying near support levels and selling near resistance levels. They anticipate that the price will bounce off support or struggle to move beyond resistance, allowing them to profit from these price levels.

  5. Moving Average Crossovers: This strategy involves using moving averages, such as the 50-day and 200-day moving averages. Swing traders enter a trade when a shorter-term moving average crosses above or below a longer-term moving average, signaling a potential trend change.

  6. Fibonacci Retracement: Swing traders use Fibonacci retracement levels to identify potential points of price reversal during a trend. They look for opportunities to enter or exit trades based on these retracement levels.

  7. Bollinger Bands Strategy: Bollinger Bands consist of a middle band (usually a 20-day simple moving average) and an upper and lower band representing standard deviations from the middle band. Swing traders use these bands to identify overbought and oversold conditions, aiming to enter or exit trades accordingly.

  8. MACD (Moving Average Convergence Divergence) Strategy: Swing traders use MACD, a trend-following momentum indicator, to identify potential buy or sell signals. The MACD line crossing above or below the signal line is often considered a signal to enter or exit a trade.

  9. RSI (Relative Strength Index) Strategy: RSI is used to identify overbought or oversold conditions in a cryptocurrency. Swing traders use RSI levels (typically 70 for overbought and 30 for oversold) to make trading decisions.

  10. Ichimoku Cloud Strategy: The Ichimoku Cloud indicator provides information about support and resistance levels, trend direction, and momentum. Swing traders use this information to make trading decisions.

It’s important to note that no strategy guarantees profits, and successful swing trading requires a combination of technical analysis, market understanding, risk management, and discipline. Traders may choose one or a combination of these strategies based on their risk tolerance, trading style, and market conditions. Additionally, continuous learning and adaptation to changing market dynamics are crucial for success in swing trading.

Best Crypto Exchange for Swing Trading based on Liquidity and Trading Volume.

First, you need to understand the differences between liquidity and trading volume. After this, we can describe why this is so important for you if you are about to swing trade crypto. Last we will list the crypto exchanges with the best liquidity and trading volumes.

Trading volume: Refers to the total quantity (the total number) of currency units that are traded during a given period of time

Liquidity: Refers to the level of rapidity which a crypto can be either bought or sold in the market for its market price.

A trader is looking for high liquidity on the crypto exchanges because it creates less risk for a great slippage. In worst case, you might not be able to enter or exit the market at all if the market is very in-liquid.

Often, the liquidity correlates well with trading volume and market cap. The larger the market cap is, the higher the trading volume and liquidity.

For extremely large volume traders, such as institutions, the importance of liquidity is vital. However, for small volume traders, like most retail investors, liquidity is not a crucial factor. Still, there are small cryptocurrencies that don´t even have a $1000 volume so don´t neglect it and don´t get fooled by it.

Pros: High liquidity reduces the risk of high slippage or missing exits/entries.

Cons: Low liquidity creates high slippage and high average entry/exit price. Be careful for extreme low liquidity.

Caution: There are scam coins and even legit small coins and exchanges responsible for wash trading. 

What does wash trading mean? 

Founders of a cryptocurrency project can trade their cryptocurrency back and forth to trick the market there is a great liquidity and trading volume in their token.

An exchange can trade a cryptocurrency back and forth to trick customers they have great liquidity and trading volume in a specific cryptocurrency.

How to avoid being tricked by wash traded projects and exchanges?

There is no easy way to stay away completely if you are about to invest in very small cryptocurrencies. One easy rule is

  • Stay to large and medium cryptocurrencies and crypto exchanges

Table – Liquidity and Trading Volume

All these crypto trading exchanges are great for swing trading since they all have the best liquidity.

In the table below, we have compared the most liquid trading pair on most exchanges for a 24h period in the beginning of December 2021. Such data is always easy accessible on Coingecko or Coinmarketcap.

Best Bitcoin trading sites Binance logo
Kraken logo
Coinbase logo

Best Crypto Exchange for Swing Trading with Leverage

Best Crypto Exchange for Swing Trading Strategy 2021 - bitcoin leverage trading illustration

You can increase your crypto purchasing power by using crypto trading leverage. However, not all exchanges support leverage trading.

In addition, leverage trading can differ a lot among different crypto trading exchanges.

There are two main reasons for a trader to use leverage

  • Increase purchasing power
  • Can take faster returns on smaller movements

There are different crypto leverage trading products on the market

  • Futures (Perpetual futures)
  • Options
  • Margin Trading
  • Leveraged tokens (Binance own product)

You have to decide which one your are going for before you can decide which crypto exchange is best for leverage swing trading for you.

However, we have listed a few in the table below with maximum leverage and what leveraged products are available.

Read more in our article about the best crypto leverage trading platform.

Table – Maximum Leverage

The table below shows the maximum leverage for each crypto trading exchange we have listed.

Best Bitcoin trading sites Binance logo
Kraken logo
Coinbase logo

Best Crypto Exchange for Swing Trading – Listed trading pairs

If you are about to start crypto swing trading on an exchange, you must ensure the crypto trading pair is listed.

How to see if a crypto exchange has a crypto pair listed?

  • Go to Coingecko or Coinmarketcap.
  • Click on exchanges
  • Find the exchange you are looking for
  • Now, click and find the crypto pair you are looking for

What crypto exchanges have the most crypto pair listed?

In the table below, we have listed a few of the most famous crypto exchanges and how many cryptocurrencies they have listed.

Make sure to note that there isa slightly difference between number of currencies listed and number of trading pair listed.

For example,

If Bitcoin is listed it only counts for 1 crypto listed.

However, there can be many crypto trading pair listed with Bitcoin. Like BTC/ETH, BTC/BNB, BTC/SOL etc.

Best Bitcoin trading sites Binance logo
Kraken logo
Coinbase logo

Best Crypto Exchange for Swing Trading – Spread and Fees

The spread is the difference between a buy and a sell order in the order book. In the screenshot from Binance below, you can see the difference in the cheapest sell order and the highest bid order.

Cheapest sell order: 0.0037320

Highest bid order: 0.0037290

Spread: 0.0037320-0.0037290 = 0.0000030 ($0.15 if BTC=$50.000)

However, lets says you are a big trader and want to buy 500 SOL. As you can see under the amount column the spread grows larger since the order book is relative small for each trading size. Here, you will have to pay a “higher spread” and this term is often referred to as slippage in trading.

Read more about crypto spreads in our article about the lowest crypto spread trading exchange.

Best Crypto Exchange for Swing Trading Strategy 2021 - screenshot of SOLBTC order book and spread Binance exchange

Trading fees are easier to compare than spread and slippage since they are fixed and not dynamic. 

Best Crypto Trading Exchanges – Trading Fees

In the table below, you find the different taker and maker fees charged by the different crypto exchanges.

Best Bitcoin trading sites Binance logo
Kraken logo
Coinbase logo

Best Crypto Exchange for Launchpads

Investors and swing traders are always looking for high-potential cryptocurrencies since here you can find significant volatility. One way to look for such coins is to contribute or sign early projects via launchpads. High potential can make a lot of money. 

However, you should always remember to weight the potential profit and the risk involved. That is one of the key points that differ professional traders from unprofitable amateurs.

Pros: With great potential, you can do a higher profit in terms of percentual gain.

Cons: When you are looking for small altcoins with high potential you need to conduct thorough research. It is very easy to fall for ICO scams or promising projects that will, most likely, fail. This is a borderline to a lottery.

Example: Bitcoin and the top cryptocurrencies offers lower potential than the most promising altcoins. Nevertheless, many altcoins don’t have any potential at all.

 

Best Bitcoin trading sites Binance logo

Conclusion – The Best Cryptocurrency for Day Trading and Swing Trading

In this crypto trading guide, we went through the most important parameters to look into before you choose what cryptocurrency is best to trade for you.

There are different cryptocurrencies that might be the best to trade dependent on your requirements and strategies.

 

Best Bitcoin trading sites Binance logo
Kraken logo
Coinbase logo

Crypto Swing Trading Strategy VS Scalping

  • A scalping trading strategy often involves making hundreds of trades daily in which positions are very short. Profits are small, and the overnight risk is eliminated.
  • A swing trading strategy may not require as much experience as a scalping strategy, as swing trading is usually less demanding regarding the time needed to monitor financial charts.

In our article about the best crypto exchanges for scalping strategy, read more about crypto scalping.

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